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Could my income level prevent me from taking the previously-owned clean vehicle credit?

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Yes, your income level could prevent you from taking the previously-owned clean vehicle credit. According to Subsection 25E(b) of the Internal Revenue Code, no credit shall be allowed if your modified adjusted gross income (AGI) exceeds certain thresholds. These thresholds are based on the lesser of your modified AGI for the year the vehicle was placed in service or for the preceding year. The relevant thresholds are:

$150,000 for married filing jointly or a qualifying surviving spouse or widow(er)
$112,500 for head of household
$75,000 for all other filers

Your modified AGI is calculated as your adjusted gross income increased by any amount excluded from gross income under sections 911, 931, or 933. If your income exceeds these thresholds, you will not be eligible for the credit.

Sources:
§ 25E. Previously-owned clean vehicles
Instructions for Form 8936 (2023)
FS-2023-29
FS-2023-22
FS-2024-14
FS-2023-4

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